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Cycles of Conflict: An Economic Model

Author

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  • Daron Acemoglu
  • Alexander Wolitzky

Abstract

We propose a model of cycles of conflict and distrust. Overlapping generations of agents from two groups sequentially play coordination games under incomplete information about whether the other side consists of bad types who always take bad actions. Good actions may be misperceived as bad and information about past actions is limited. Conflict spirals start as a result of misperceptions but also contain the seeds of their own dissolution: Bayesian agents eventually conclude that the spiral likely started by mistake, and is thus uninformative of the opposing group's type. The agents then experiment with a good action, restarting the cycle.

Suggested Citation

  • Daron Acemoglu & Alexander Wolitzky, 2014. "Cycles of Conflict: An Economic Model," American Economic Review, American Economic Association, vol. 104(4), pages 1350-1367, April.
    • Handle: RePEc:aea:aecrev:v:104:y:2014:i:4:p:1350-67
    Note: DOI: 10.1257/aer.104.4.1350
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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